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Demand Based Pricing: Described methods belong to the category of demand / market based pricing:-
1. What the Traffic can Bear' Pricing
2. Skimming Pricing
3. Penetration Pricing
The price elasticity of demand is taken into account in all of the demand based pricing methods, indirectly or directly. Price elasticity of demand refers to the relative sensitivity of demand for a product to changes in its value in other words how significantly the sales of the product are affected when price is changed. If decrease or increase in the price of the product results in significant increase or decrease the product is said to be price elastic conversely, if price change does not considerably affect the sales volume, a product is called to be price inelastic.
Explain about the Tangible Goods Most goods, whether these are industrial goods or consumer goods and whether these are durable or non-durable, fall in this category as the
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Describe the inelastic demand and fluctuating demand in business market and the consumer market. Inelastic Demand: The demand for several business goods and services is i
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